CATCH THESE HIGHLIGHTS
ES: M Culinary, for those that don’t know, tell us a little more about it.
MS: M Culinary Concepts, we are the food and beverage experience. We are a diversified hospitality and services provider, event catering, business dining where we feed employees onsite at workplaces. Large format spectator events, a little something you may have heard of, the Phoenix Open, and in the summer months, we feed Wildland Firefighters and because we weren’t busy enough we also decided to create a consulting firm.
ES: If you can, because I know we’re gonna touch on this in a little bit, can you talk a little about your mission and your core values.
MS: Over the last few years we’ve worked very hard at this. Mostly because we did have a mission statement, and one manager in the company could quote verbatim. It was way too long. We’re knuckleheads. We’re food and beverage. We needed to simplify this, but we really needed more of a guiding principle more than anything. We needed to make our decisions in a different way, and we started with our vision mission and core values. We started with that mission, “Customized experiences that surpass expectations.” Simplified, to the point, but brought enough as well that we’re not pigeon holed to just say catering which is what we’re known for. Then we found our core values, and we started with 9, went to 7, went to 5 and boiled it down to 3 and then took longer phrases and boiled them down to 2-3 words each – again, keep it simple. Inspire passion, integrity always and make huge fun. We knew going into it that fun needed to be a part of that. Integrity, without a doubt because that reflected not only in the decisions we make and the behaviors, but even in the product we put out there in the marketplace – our food. And passion, well, one thing food and beverage professionals are known for is their passion, and we are unrelenting in the pursuit of that passionate expression. Lastly, we should have done it first, but lastly, we came up with our vision, and a big part of that vision is rooted in this fundamental need we have to give back. So we sat there and went round and round talking about the community and came up with, “We envision a community nourished by selfless difference makers.” Again, we didn’t want to pigeon hole it into something specific that we do. We came up with nourish because nourishment is something we do. It’s nourishing the mind, body and soul. It’s not just feeding people, it’s taking care of people. It’s us doing good work in the community that benefits us all. That became the guiding principles for us that we so desperately needed and helped us make decisions in a new and more meaningful way.
ES: I’m going to lead you up to a timeline here, March 16th. Covid is happening. Tell me about March 16th for M Culinary?
MS: I’m going to back you up one week and tell you about March 9th. March was the first day of our catering industry’s largest gathering called Cater Source which is merged with another conference called The Special Event. Thousands of my colleagues from around the world were gathered in Las Vegas at Mandalay Bay for the beginning of the conference. It started on Monday March 9th. That same day, everyone at the conference phones started exploding. Phone calls, text messages, emails all about cancelations, postponements, questions about contract deposits, and it just got worse from there. By the end of the week, Friday the 13th, I was flying home, and I had left friends in Vegas who were flying home to shut down their businesses. Monday the 16th, the partners gathered in the CEO’s office. We got behind closed doors with the rest of the executive committee, and I wrote on one side of the board March 16th and on the other side of the board September 16th thinking, “6 months – okay, we will get through this.” The principles we are guided by lead to the decision making in the room that day. We knew we had to make a lot of hard decisions immediately, and we knew that whatever we decided was 1. Was it going to insure the company’s survival? 2. Can we look our employees in the face and tell them the decision we’re making? 3. Six months from now, will we still feel proud of the decision we made and 4. Six months from now, are we going to be in the position we want to be to take advantage of the opportunity that inevitably will be on the other side of this? Without that vision, mission and core we established, I don’t think we would have made the right decisions.
ES: Speaking of decisions and tough decisions tell me about the employee decisions you had to make? You had over 200 employees, full time employees, and after March how many did you have?
MS: We had over 250 full-time and full-time equivalent employees, and by the end of that week, we were down to less than 70. We acted quickly. There was no PPP yet. We did hear rumors of unemployment insurance being supplemented, but we knew furlough wasn’t going to be the right move for us, nor was it going to be the right move for our employees. It would have limited them access to certain benefits. We thought we didn’t know how long this was going to last but even more so, we were about to hit the summer and two months later everything slowed down for us, and we knew we would be in for three and a half to four more months of slow down regardless of the pandemic. We just decided at that point to go through layoffs rather than furlough and treat our employees with honesty and frankness and directness that they deserved. Communication was key. Our CEO, all the way down the line, every manager was given the same messaging to deliver to the employees, and most importantly, gave the employees the opportunity to ask questions of us and answer them as directly as possible. A lot of answers at the time were, “I don’t know” because we didn’t. But we followed up “I don’t know” with “we’re gonna figure it out.” And we just kept in communication with them the entire time.
ES: Our relationship started in April, so I’ve really had a chance to communicate with you, have discussions with you through the various things that somehow we’re just mutually involved in. Okay, there’s a GPEC Regional Report – there you are. There’s a Best Buddies Gala – there you are. The world was bringing us together, and I think for a reason because your mindset is something that I – that’s why I keep asking and saying you need to be here because I want people to hear your mindset on certain things. You were the first one to call me out on using the word ‘pivot.’ And I was just using that word left and right around March and April and you said, “Can we just stop using the word pivot?” And I sat back like, you’re right. Why did you in that moment say we need to stop using the word pivot?
MS: The funny reason is my wife is a Friends fanatic, and I just kept thinking of David Schwimmer’s character screaming pivot over and over, but the real reason I think was I’m not a fan of words that were misused let alone overused, and pivot was overused very quickly. Most importantly, it was misused by a lot of people. What my team and I did, we didn’t pivot. We didn’t go outside of our normal and broad based business model. We just changed the way we delivered our product to people and changed the way we sold our product to people and identified new clients for that product.
To me a pivot…is taking your resources and completely changing your business. For us, we simply looked at the resources we had and figured out new ways to utilize them, and new ways to offer those to existing clients, but still fundamentally at its core food and beverage. So for me I was just a little tired of the word pivot and because that was the first question everybody asked. How are you going to pivot?
ES: The other one is ‘forecasting.’ And you said to me, whatever forecasting you have, crumple it up and throw it in the trash. And I like the way you’ve uniquely rephrased how to forecast.
MS: Forecasting means predicting, and we very early on realized everything about this was unpredictable. If you’re faced with unpredictability, we shifted into ‘scenario forecasting.’ If A occurs, we will do B. If C occurs, we will do D. If E occurs, we will do F. We couldn’t tell you what was going to happen. We wouldn’t tell you when it was going to happen. We couldn’t tell you how it was going to happen. All we could do is play out scenarios, both financially as well as environmentally, and calculate our response to them. If things improve by this date, we can take action. If our financial situation reaches this level, we will do this, and it just became an if/then scenario. I think anybody who continued to work off a forecasted budget was insane. At least in our industry because we are after all completely dependent on people gathering in groups to enjoy food and beverage together and experiences together, and that is the very thing our clients couldn’t do.
ES: That’s why I wanted to bring you on so bad because there’s such a spectrum of recovery right now in Arizona, with local businesses. There are some that are doing well, there’s some that are thriving. And then there are others who are really really struggling, and your industry your exact business was hit so hard, but here we are in recording this in December, and you’ve hired some employees back. You’re bringing employees back. You have confidence in when a full recovery within your organization is going to happen. And a lot of that is due to, tying everything back to your mission, for scenario forecasting. Not really pushing the panic button. So, if you can sort of sum up this year, and where you feel now going into 2021?
MS: The year has been the most challenging of my professional life and the strangest of my personal life for sure. One of the things that saved us was our diversification that we went through years ago. As we said, people gathering together and experiencing food and beverage and experiential special moments, that’s our business. We realized many years ago, about 15 years ago, that we needed to find other opportunities to express that, and one of them was business dining, feeding employees at their workplaces, running cafeterias, vending coffee and refreshment services. Another is federal contracts, and working with the US Forest Service to feed wildland firefighters and support personnel at wildfire sites all over the Western US. It actually was kind of ‘necessary being the mother of invention’ because we needed summer business, summer revenue. That provided summer revenue for us. Sometimes the season is weak, and sometimes it’s very busy, so it generates a significant amount of revenue for us, but that diversification also gave us the opportunity to repackage what we create. Which is this food and beverage that goes out to different clients all over the valley and all over the country. We were able to repackage that for health care workers. We were able to repackage that for our business dining customers who wanted to feed their employees even though they were working remotely. Supporting our clients and our community partners efforts to feed the larger community as well. So all of those things helped us generate revenue, even if it’s not our typical margin for us. At least, it provided the cash flow, and most importantly provided the hours we could fill with our employees and bring them back. So that’s given us the opportunity here on December 15th to say we’ve brought this many people back and based on the timeline we’re estimating for ‘21, scenario A, scenario B, scenario C. This is when we can continue to bring people back. So we’re going into ‘21 with this philosophy of ‘hindsight is so 2020.’ We’re never going to look back at it. It’s in the rearview mirror, leave it there, and we’re going to take the lessons we learned in 2020 which is pretty much be prepared for anything. So we’re going into ‘21 with a strategy. We created a budget because we needed to have something to work from. We mapped out a scenario. If this occurs, this is what it will look like month-to-month for us and at these points, this is when we can hire the next wave. This is when we can reinvest in our company’s resources from marketing to technology. This is when we can prepare for the inevitable, whenever that occurs, meaningful recovery. I say meaningful recovery because smaller recovery might happen along the way, but that consistent, sustainable recovery for the hospitality industry by our best forecast will be late in the third quarter meaning September ‘21 and more likely 4th quarter of ‘21, and we’re hopeful that the recovery in ‘22 will be a sharp rise in revenue for all of our industries.
ES: Last thing, and let’s stay within your industry for some of the small restaurant owners out there in Arizona. What would be your advice? We’ve talked a lot today about lessons learned in 2020, but I know you have people in this room who asked you, who are either sometimes panicking when they come to you, or sometimes optimistic about 2021. So what are those conversations, what are those recommendations you have for the small business owners who we know have been really struggling in 2020?
MS:I think the first thing is take a very honest assessment of your resources and look at them in the context of what is really meaningful to you. What is meaningful to you as a business owner? What is meaningful to you as a citizen? What is meaningful to you as a member of your respective community? Let those values guide your decisions. If taking care of your employees is the most important thing to you as a business owner then you need to figure out a financial model that will work to do that. If making sure that your company is here on the other side of this pandemic is the most important thing to you then be prepared to have some very honest and difficult conversations with your employees and your family and loved ones about how you’re going to get to the other side of this. Gather everything you can together, steal against it but the reality is know if you can make it and know when you have to pull the plug. I think one of the worst decisions business owners make is staying in it for way too long and not being able to face that reality. Give yourself those milestones on when you have to take those distinct actions quickly, but be guided on what matters to you on a personal and professional level before you make any other decisions.
ES: Yeah, I’ve talked with some other business owners in similar situations where there is a strategy to bow out gracefully right, and not you’re not giving up, you’re not saying, I’m a failure either there’s ways to do it correctly if those decisions have been made, but I think you said it right. You have to ask yourself those challenging questions before you make that decision.
MS: There is a graceful way to do it. There is a strategic way to do it. Give yourself the breathing room to have another crack at it. If that’s what you want to do, but don’t put yourself so far into a hole that you can’t climb back out in any meaningful timeframe.
You’ll end up trapped. It might require some hard decisions. Also, reach out to your community, reach out to your fellow business owners, reach out to those in your industry and outside of your industry. And if you feel frustrated, if you feel that nothing is changing, if you feel that nothing is having a meaningful impact on your business, then see what you can do gathering with others and putting your voices together and putting your heads together and reaching out to your leaders to your community and finding ways to help your industry, help your own business as well at the same time. But at least you won’t feel stuck as much, at least you won’t feel at the mercy of everything. I think that’s when we are the most scared is when we feel completely out of control. Human beings don’t do well when they don’t have answers, and uncertainty is a terrible thing. So, control the controllables, I guess is the phrase that people use, you know and have the courage to fight for what you believe in, aligning yourself with people of like mind.